There are some definite ups and downs to this numbers game – fortunately, the ups are outweighing the downs so far.
A handful of Berkeley Middle eighth-graders are shooting their shot in a school-level “stock market game” with the help of their math teacher, Damien Callum. It is not real cash they are working with, but they are making bank, and even giving high school teams a run for their money – literally.
More importantly, they are learning about personal financing and getting ready for harder math classes once they head to high school, and they are doing something fun with their math skills.
Callum teaches eighth-grade math at Berkeley Middle. He is new to the school this year and previously taught in New Jersey. He enjoyed running a stock market club at his old school, so during his interview with Principal LaTanya Butler, Callum asked if he could start a new stock market club for the school and was given the go-ahead.
The club is now up and running, and geared toward educating students on world economics with the intent of expanding their knowledge of personal finances.
“Personal finance is part of their life…so why not start learning this stuff now?” Callum said, adding it also keeps students up to date on current events. “Different things affect us as a whole, as an economy.”
As a club, students participate in a 10-week stock market simulated competition sponsored by New York non-profit, the SIFMA Foundation.
Callum said the stock market game is an online simulation of the global capital markets that engages students in fourth through 12th grades in the world of economics, investing and personal finance. And, the game has already prepared nearly 20 million students for financially independent futures.
Each team in the competition receives $100,000 simulated money to trade any stocks and mutual funds that they choose. The teams that make the most profit at the end of the 10 weeks are declared winners. Berkeley Middle’s club is a team itself, but within the club are smaller teams of two or three students working together to make a profit through the game.
The club meets before school on Tuesdays and Thursdays to discuss what is going on in the economy at the moment, and then they will research stocks to buy or sell based on what they read in the news around the world – so the game is based off of real stock market numbers. Students enjoy bagels and juice while they discuss their investments. The students keep online portfolios on their Chromebooks.
The students find their stocks on Yahoo Finance. They can buy whatever stocks they want but there are certain criteria they have to follow; they cannot spend more than $30,000 on a particular stock, and they are charged interest rates for stocks held overnight.
The United States stock market technically does not open until 9:30 a.m. One of the program rules is that students cannot instantly buy a stock but they can put in an order before the market opens, so the students will not officially receive the stock until the market closes at 4 p.m..
“They have to plan ahead as far as what the market is doing,” Callum said.
Since the students are trying to buy stocks in hopes that they will go up, one concept Callum is teaching them is taking risks by buying stocks that have taken a big loss with the hope that the stocks will go back up.
“I’ll advise them on different things...and I’ll show them different stocks, and they have to make their decisions,” Callum said. “Sometimes we’ll make a group decision and we’ll buy something; somebody might buy and sell it within one day and make money, and somebody else might hold onto it and they’ll see their profit diminish because they didn’t sell it, and the stock is going the opposite way that they want.”
This is not the “civilized” or “traditional” way to invest in the stock market, but because this is a 10-week competition, the goal is to find ways in the market to make money quickly, so the students have to think fast when making decisions.
They will also talk about events going on around the world and how they impact the economy. For example, they have discussed how COVID affected oil prices, among other major economic impacts.
As they look at current events, Callum will advise the students on when to pull out of a stock.
“Sometimes you’ve just got to take that loss and get into something else that is more profitable…and they can offset those losses," he said.
Callum’s students are currently ranked first, second, fourth, fifth, sixth and seventh out of 117 middle school teams. They are also second out of 695 teams for all divisions – including high schools.
When they met on Tuesday morning this week, students made a handful of observations before they started making any serious decisions: FOX Corporation’s numbers went down a little bit the previous day, while Netflix went up slightly and Callum predicted it would continue to do so on Tuesday, while Home Depot was not predicted to hit its target range.
“The market moves because of news,” Callum told his students when they talked about analysts.
They also talked about short-selling, which is when one buys a stock and then sells it shortly afterward, expecting to buy it back later at a lesser price.
“When you short-sell something, that’s not something you want to keep for the long term,” he told them, adding, “Because those fees for borrowing something, it adds up.”
Callum is not sure what competition participants receive if they win just yet, but he hopes his group will rank in the top three in the region.
Currently, the students in the club are all Callum’s Honors Math (Algebra I) students, but he hopes to open the club up to all eighth-graders when the spring competition starts next semester.
Leila Schultt and Adrianna Kelley make up one of the mini-teams and, as of Tuesday morning, are ranked in first place. They have a system in place where one of them looks at losses and the other looks at winnings; they communicate their findings with each other and buy stocks based off that information.
The girls said they have learned a lot about that particular communication piece, because it can result in a major loss in their stocks; they said they once lost $9,000 in one night because of a miscommunication.
Schultt joined the stock market clubs in hopes of just learning how to provide for herself later on in life.
“I just want to be able to make money in the future – and I want to know how,” she said.
The students are pretty competitive, too; the girls said it feels good to win, and they enjoy teasing Callum if his own stocks drop in the game (which they recently did).
“He’s always making fun of us for not selling stock – but then, he doesn’t sell a stock,” Kelley said.
Callum’s rebuttal to this is pretty straight-forward.
“I’ve already learned from my mistakes – I want you to learn,” he said.